TVO appeals Areva state aid decision

13 September 2017

Finnish utility Teollisuuden Voima Oyj (TVO) announced today it has filed an appeal against the European Commission's approval for the French government to inject €4.5 billion ($5.4 billion) into Areva. TVO claims the plan does not provide sufficient guarantees that the Olkiluoto 3 EPR project will be completed.

France notified the European Commission in April last year of the planned restructuring of Areva, which is 86.5% state-owned, in a bid to restore the group's competitiveness. The plan sees Areva divesting its nuclear reactor business, focusing its activities instead on its nuclear fuel cycle business. The government is injecting €4.5 billion of public capital to help the company bear the costs of the restructuring, which is expected to be completed in 2019.

In January, the commission approved the restructuring plan, ruling that the French government's capital injection into Areva does not breach European Union state aid rules. It also approved a loan of €3.3 billion from the French state to Areva, which would bridge Areva's liquidity needs until the capital injection can take place.

French utility EDF agreed in July 2015 to take a stake of between 51% and 75% in Areva's reactor unit in a government-backed plan to revitalise France's nuclear power industry. The reactor operations to be sold have been transferred to a subsidiary wholly owned by Areva NP, referred to as 'New NP'. Contracts for the Olkiluoto 3 (OL3) EPR project in Finland and for resources required to complete that project, and some contracts relating to components forged in the Le Creusot plant, are not included in the sale. Those contracts will remain within Areva NP.

TVO - the customer for which Areva is constructing Olkiluoto 3 - has now filed an appeal with the General Court of the European Union against the European Commission's approval of the plan.

TVO said it is reliant on Areva to complete construction of the new plant. It said, "TVO is not opposed in principle to the intervention by the French State in favour of the Areva Group, provided that TVO's needs for OL3 EPR are fully taken into account, which is currently not the case."

The Finnish utility claims the restructuring and recapitalisation plan for Areva "does not provide sufficient guarantees to TVO that the necessary financial, technical and human resources are to be made available for the OL3 EPR project". "TVO also thinks the plan "does not ensure that Areva is able to meet all current and future liabilities during the last phases of project completion and until the end of the guarantee period".

The Areva-Siemens consortium began construction of Olkiluoto 3 in 2005 under a turnkey contract signed with TVO in late 2003. Completion of the 1600 MWe reactor was originally scheduled for 2009, but the project has suffered various delays and setbacks.

According to the latest schedule provided by the Areva-Siemens consortium in September 2014, regular electricity production in the unit will commence at the end of 2018. Cold functional tests of the reactor's primary circuit - an important step in plant commissioning - began in June, with hot functional tests scheduled for later this year.